Intel Sees Signs of PC Market Bottoming Out, if Not Bouncing Back
However, the company’s CFO Stacy Smith gave the first indication in quite some time that the market for personal computers, which have been declining at rates previously unheard of, may be close to “bottoming out.”
After reporting results for the third quarter that beat expectations, the company issued guidance for the fourth quarter that fell short.
On a conference call with analysts, Smith said that outlook for the fourth quarter “… reflects the caution from our customers due to weak consumer end markets for the PC segment of our business.”
Smith went on to say that Intel is seeing some “positive trends.” Corporate PC buying “strengthened” during the third quarter, he said. And the consumer market for PCs in the U.S. and Europe had “appeared to bottom out.”
Intel’s business of supplying chips to PCs accounted for about 63 percent of its overall revenue in the quarter, so a return to anything resembling health in that segment would be very good news indeed for Intel shareholders.
Later, CEO Brian Krzanich said the company expects to see some “stabilization” in mature markets like the U.S. and European countries, while countries like China and others in Asia appeared to be “volatile.”
Last week, market research firms IDC and Gartner both reported steep declines in PC sales during the third quarter from last year.
Intel has been trying to reignite some excitement and also growth in the staid old PC market. Some things have come from pleading patience, but it also hopes to change the discussion around tablets and convertibles that are sometimes tablets and sometimes notebooks because it aims to supply a lot of chips to those kinds of devices.
“We’re actually pretty excited about the rate of innovation we’re seeing in two-in-ones, in convertibles, in OS forms, Android, Chromebooks and Win 8.1,” CEO Brian Krzanich said later on the call. “I’ve been astonished by the amount of innovation and creative designs that are coming,” he said, referring to forthcoming products from Intel customers. “When you talk about the market in general, we’re trying to bring innovation to the PC, but we’re also trying to move into these markets that are growing, like tablets and phones, so our view is that the customers are going to choose their form factors. Tablets are here to stay and we plan to participate.”
Krzanich said that as the latest generation of Intel chips — specifically the Haswell generation of processors — has come to market, the company has already started to see what he called “win back” in share from tablets using non-Intel chips like Apple’s iPad — especially, he said, in the enterprise. “People see the value of having the best of both devices, a tablet and a PC in one.”